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Low Cost Products At Asda

Paper Type: Free Essay Subject: Marketing
Wordcount: 4151 words Published: 20th Apr 2017

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ASDA very rapidly today has become the market leader in the British retail industry, belonging to the Wal-Mart chain of retailers, ASDA aims to offer the lowest possible price in the market, thus winning market share and expanding its customer base. ASDA employs a very smart and effect marketing strategy, where it aims to win its target represents the organisation using the marketing mix with maximum output, and is in line with the overall strategy of the business.

1.1 Marketing plan and support to strategic objectives.

It is believed that the marketing plan of any organisation should act as the support function to the overall objective of the organisation, thus complementing each other in all strategic aspects.

Impact of strategy on marketing plan

Marketing planning as defined by CIM is:

A written plan, usually in depth, describing all activities involved in achieving a particular marketing objective and their relationship to one another in both time and importance.

Further to this he describes and divides the marketing planning process into two aspects. The first aspect (business level) can be best represented by the illustration below:

Business Mission

Marketing Audit

SWOT Analysis

Marketing Objectives

There are six key planning questions as follows:

What is the current position of the organisation?

What contributed towards there present position?

What direction is set for the organisations future movement?

Where does the organisation aim to be or the level it aims to attain in the near future?

What needs to be done to achieve these objectives in the set frame of time?

And finally is the organisation heading in the right direction and is inline with its organisation objectives?

In the case of ASDA the marketing plan is completely inline with the mission of the organisation, which is to provide, quality products to the consumers at the cheapest possible price, considering the marketing audit for ASDA, can be considered using Kotler et al (2005) definition of marketing audit, where marketing audit may be defined as:

A comprehensive, systematic, independent and periodic examination of a company’s environment, objectives, strategies and activities to determine problem areas and opportunities and to recommend a plan of action to improve the company’s marketing

External audit

The macro environment:

The political, legal and fiscal environment for ASDA in the UK retail industry is very stable, there are no legal or political complications other than the standards that need t be maintained in regards to the FMCG regulations in the UK. The fiscal position is also very much stable for ASDA as it is backed by its mother company, Wal-Mart who are the biggest retail giants in the world. Economic and demographic conditions also are very stable, in regards to unemployment and inflation, as ASDA has successfully established itself as the biggest and the cheapest retailer in the UK. In order to combat any social or cultural issues ASDA caters to all communities and believes in fair trade products, more recently they have introduced a whole new range of healthy eating food and encourage consumers to eat healthy at low prices.

Task environment:

ASDA is well established in terms of market share and growth, the retailer is growing in the UK and now has retail outlets all along the country, the major competitors for ASDA are Sainsbury’s, Morrison etc but the edge that ASDA has over them is its low price. ASDA are ethical traders and fulfil all the requirements of fair trade, and socially share a good position in the mind set of consumers, there marketing strategy has proved to be very effective and efficient for them, where they have successfully established themselves as low cost, quality product with offers like weekly rollovers etc successfully made place in the minds of consumers.

Internal audit

Inbound logistics: well structured and efficient

Operations: well co-ordinated and managed

Outbound logistics: well structured and efficient

Sales and marketing: well stained and efficient employees that represent the business

After sales and service: excellent service delivery standards

Support activities: well defined functions for each department like HR, IT etc technological up beat with the market, with services like self service, recently introduced.

1.2 Components of marketing plan

SWOT is a common device intended to be used in the introductory stages of decision-making and as a pioneer to strategic planning in numerous applications (Johnson et al., 1989; Bartol et al.,1991).


ASDA’s reputation for low cost products has a substantial market share in the UK. Well known brand name from Wal mart gives it an edge over its competitors.

economies of scale, large Profits, Large car park facilities, long hour of operation, Resource capabilities, easy access, Lots of other facilities i.e. coffee shop, travel agents etc. are its main strengths.


The weaknesses of ASDA are that it is still largely dependent on UK for its sales.

UK/EU legislation prevent ASDA and wal mart from carrying out monopolistic practices. Own brand products from ASDA are not a big brand which might decrease its market share in respect to the individual food brands. It has become a large company, therefore may be difficult to control/co-ordinate activities.


The growth opportunities n Europe and Asia provides excellent opportunities for growth. Most importantly, the growth of online sales shows excellent opportunity for increasing the sales of ASDA. Mini restaurants, range of takeaway meals are the main areas of expansion for ASDA. Telecentres, Cybercafé offering customers access to fax, internet etc can be areas where it can have an edge over its competitors. They should also look to Expand internet/home shopping – in line with need for emergency/top up shopping.


Change in consumer buying patterns n the UK because of change in technology can lead to loss of customers in UK. In an oligopolistic market there is intense competition with competitors like Tesco, Aldi, Lidl and Morrisons. Rising costs in terms of minimum wage is another threat for ASDA. Loss of business due to online shopping is ripping apart their business. Increased choice for customers has also had negative impact on their business.

Ansoff matrix

Strategic marketing planning tool is linked to the firm’s marketing strategy. These strategies seeks growth: (1) Market penetration (2) Market development (3) Product development (4) Diversification. (Ansoff, 1941).

One of the largest retailers in the United Kingdom is ASDA. which became the subsidiary of Wal-Mart. The mission of ASDA is to be “Britain’s best worth retailer exceeding customers’ needs- Always.” The main reason of the company is “to make goods and services more affordable for everyone.” When ASDA became the secondary of Wal-Mart it engaged the three core values of the company which are, respect for the individual, strive for excellence, and service to our customers. ASDA was the retail giant of Britain, getting takeover of diverse supermarkets in order to race with the best in the business.

Strategic objectives

– Build market share

Wal- Mart is biggest company, in terms of its worth, in the world. Its subsidiary ASDA is one of the largest retail chain in the UK. It consists of 17% of UK retail market share. Owned by Wal-Mart Stores, the largest company in the world by worth, ASDA is the next largest supermarket chain in the UK with 17% of the market share. This include sales of non-food items. ASDA overtook Sainbury’s in July 2009 (they are now floundering with 16.2% of the market) although it is still a long way off Tesco’s almost unassailable 28% market share.

– Hold market position

According to 2010 mission, the following are the objectives of ASDA: One of the aims of ASDA is to become accepted for eventing and reaching mass public relations for any action that the company does, To increase sales and engage vital suppliers to maintain their active market share in the worldwide market.

– Harvest income or profit

As ASDA ensures its continues growth in the UK retail market. This makes sure the increased popularity of ASDA among people. This is the only reason of why ASDA has surpassed Sainsbury in terms of market share. Better customer service and different ways of interaction with customer ensures ASDA continues incomes. ASDA currently has captured 16.4% market share which is second to Tesco.

– Divest

Walmart’s global expansion targets US neighbours (Canada, Mexico, Puerto Rico and Argentina), the countries with the largest family income (Britain and Germany), and countries with huge populations (China, Korea and Brazil). The company has a rule of acquiring big supermarket chains aggressively, as it did with French hypermarket giants Casino and Auchan, and Japanese supermarket Mycal.

Core marketing strategies

Company has totally changed its strategy and switched to WAL- MART, which specifically concentrate on the price of the product and low advertising budget. ASDA currently diversifying in both food and non food segment like different pharmacies department, different kinds of jewellery and more other concepts in order to ensure its presence in the target market. Besides its suppliers product ASDA now a days selling its own brand with the 100% guarantee of taking back if not suited to its customer needs. Further on, ASDA is known for its large assortment of product with the low prices and good quality. Therefore it also applies different strategies to customer segmentation which provides it a depth understanding of customer mind set and the way customer behaves towards different product

1.3 Risks in marketing plan

Political: Political concept is very dynamic in its nature, there are several regulations towards huge out of town supermarkets. This regulation has affected ASDA negatively as there are various places in UK where ASDA is absent. Therefore, concept of adding up new stores can not be implemented and due to which revenues are not increasing.

Sociological: People coming from different countries are causing ideal standard of wages. These people are addressed as cheap labour who directly affect British workers. Therefore ASDA being as company hiring these cheap labour rather than local labour.

Structure: Being a subsidiary of WAL-mart, ASDA has adopted the common structure of WAL-MART where products/good are sold on cheapest price compare to other competitor. Further on, it has been diversified its operation to non food items also so it has become an advantage for it. Main strength of the company is its low prices however this is an issue for it also regarding it labour wages

Culture. As mentioned above ASDA adopted every work culture of wal-mart. Whether is it low prices on daily basis compare to other competition. However, this adoption is not working in the favour of ASDA so far because of the competition.

2.1 Construction of market plan

Marketing mix

Their marketing mixes of ASDA are as follows: Good product range to satisfy what people want most, the necessities. Low prices in its products make ASDA a powerful player in the market. As many strategically placed stores as possible, with a good expansion programme. Heavy advertising of their price philosophy and convenience to promote and market itself. Clean stores, comprehensive range, food and clothes, good prices are a definite plan coupled with their orderly processing to give excellent physical evidence. Staff training is friendly and helpful to maintain proper employee (people) relationship.

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Besides traditional 4P’s of marketing mix, 3P,s like people, physical evidence and process also contribute its advancement in order to serve the marketing mix purpose. Therefore, they are also called collectively called the part of marketing mix. Here People describe employees as back bone of the company. Physical evidence is the environment and process is the actual concept of revenue generation.

Today market has little opportunities which require companies to have effective concepts to gain different perspectives of customers regarding company’s product. Today’s market demands an adjustment to see things from your customer’s perspective. There are different concepts in marketing which are claimed to replace four p for example 4c approach. Which stands for customer value, cost, convenience and communication; however whether it is 4p or 4c both of the concept serves customer? Therefore in order to gain competitive advantage it is important to gain proper understanding of the customer.

2.2 Mitigation strategies

Strategies for building a competitive advantage

– design (place as character)

– Infrastructure (place as fixed environment)

– Basic services (place as service provider)

– Attractions (places as entertainment and recreation).

Inside the firm, the mission statement serves as a focal point for individuals to identify the organization’s direction and ensure unanimity of purpose within the firm, thereby facilitating the emergence of an organizational culture. (Wilson and Gilligan, 2005)

Every organisation has few code and conducts to decide and control their pricing strategies. In addition to this, they have little measure to control internal pricing factors, like cost of raw material, production cost, staff salaries etc. It is always

Proctor’s control procedures

Improve Follow-up. Follow ups is the main bone of sales because first contact can contribute only 2% sales where as it requires lots of meetings and contacts to convert the prospect into sales. Therefore, telemarketing team must be on their toes every time they talk to the customers. The more follow ups the more chances company has to convert prospects into its customer.

Sales Cycle Efficiency. Sales always estimated by target within a certain time period. Therefore it is necessary to change prospect leads into final customers. This conversion determines company’s sales cycle.

Life-Time Value. Value is classified as a benefit which is always associated to the product. Value enables companies to retain its existing customers and keep them loyal for long period of time. However long term customer should be profitable which can be defined by LTV. It is suggested that companies should try to retain tis existing customer than wooing new ones as it would be ten times expensive. Existing customer are more likely to show their repurchase intention eventually become profitable.

Demand Forecasting. Demand is the concept which has great value in this current competition. Demand can be generated by launching new product which a customer was not aware about. However it is necessary to forecast the demand as product life cycle is shrinking day by day.

Improve Lead Quality. Tele marketing is the concept which has brought lots of opportunities for organisation in order to get leads relating to the potential clients. However it is necessary to ensure that every lead generated should be qualified

Increase Awareness. Awareness about company and its product is necessary in order to perform well in market. There are different tools in communications to increase awareness about product, however public relations is one of the best tool for it. While number of companies still trust advertising concepts than PR.

Reduce Discounting. Discount is used to increase sales, however it seldom shows incapability of sales and marketing staff of selling product. Therefore it is necessary to find out the problem and solve it rather than using discounting concept.

Train Personnel. Giving continues training to sales and marketing staff would make sure consistent knowledge of both product and customer needs. Further on, perfect knowledge of product enables them to negotiate at their best which further on boost up their confidence level.


Planning is necessary to make sure the flow less process of revenue generation. Planning is done via marketing plan and marketing plan enables organisation to implement proper strategies in order to gain the competitive advantage.

However, corporate objectives should be assisted by marketing plans. Corporative objective always refers to the organisation as whole. Therefore every plan must contribute towards it.

AOSTC. It is one of the broad concepts in order to write a marketing plan. It simply stands for

1. Analysis – environment.

2. Objectives – Setting SMART objectives.

3. Strategies – For segmentation and growth, targeting and positioning.

4. Tactics – Used i.e. marketing mix

5. Control. – How you will monitor that you are achieving objectives.

ASDA is the 2nd largest retail supermarket chain in the UK and to keep up its reputation it has to develop plans to fulfil customer satisfaction in the future. its plan should be quite clear and simple.

To reduce the cost objectives of their products.

To provide products and services those are affordable by customers.

To recycle their waste

To package their products attractive to the customers

To support charitable and voluntary services.

3. Marketing plan and strategic objectives

3.1 How plan supports strategic objectives

Delegation of authority always encourages employees to become expert into their fields. This process leads to different employees situated at different places to work collectively. , “there must be a plan showing how the work will be organized. The plan for the systematic arrangement of work is the organization structure. Organization structure comprises of functions, relationships, responsibilities, authorities, and communications of individuals within each department”. (Sexton, 1970, p. 23).

Traditional Structures

Organisation related to traditional structures emphasizes on different functions or departments within company. This kind of structure makes every level of management aware about their line of authority. Traditional structure can be divided into two approach line and line in staff.

Line-And-Staff Structure

Line format of traditional structure is not suitable for big companies. Therefore line in staff format is applied to them just to make sure of work is divided properly among different employees as per their capability. Hence work of organisation would be flow less in making sure of guidelines given. (Boone and Kurtz, 1993).

Matrix Structure

Those companies, which are classified as per the project are called matrix organisation. These kind of companies consist of both vertical authority relationships (employees report to their respective seniors) and horizontal work relationships (employees report to their project manager about time line of the concerned project)Keeling and Kallaus, 1996,p. 43).

Geographic organisation and customer equity management

Although customer equity can be calculated in different ways, one definition of customer equity is in terms of “the sum of lifetime values of all customers” (Rust, Zeithamal, and Lemon 2004). Customer lifetime value (CLV) is affected by revenue and cost considerations related to customer acquisition, retention, and cross-selling. Geographic segmentation is where the market is divided into different geographical unit such as nations, regions and states. The next one is demographic segmentation where the market is divided into groups based on variables such as age, gender and income. This two is the most popular type of segmentation (Kotler et al, 2001, p.66).

Marketing strategy and implementation

Marketing strategy is classified into four parts 1) Customer audit and customer market segments trends; 2) Strategic target segments, capability, positioning, value proposition and branding; 3) Tactical plans for product line, distribution and sales, promotion, and pricing; and 4) Implementation.

Marketing strategies used R&D to explore new needs of customer in order to launch new and different products in the market.

Marketing control

According to Kotler – “Marketing control is a process to measure actual marketing performance achieved with that of planned performance and take corrective step is any deviation is there between actual and planned performances. Marketing control process includes formulation of performance standard, performance appraisal, deviations correction and marketing plan reformulation”




Management by common sense

Product orientation/ego involvement

Success by chance or lack of competition


Lack of understanding of marketing

Lack of belief in marketing

Lack of belief in marketing

Resistance to change

Short-run orientation vs. long-run payoff of marketing


Lack of competence of marketing personnel

Lack of leadership

Lack of power

Conflict with other departments

Problems with measuring marketing’s contribution to corporate success


Personal stake

Goal congruence


Communication is the key of success for any company. Its foremost goal is to create awareness of business, product and companies position among customers. Different tools of communication could be websites, brochures, media, and involvement in trade shows. By using different tools of communication, company encourages target customers to buy more.



Training can be a crucial part of achieving something. Training can be classified in three types 1. Proper understanding of industry 2. Understand the capacity of business 3. Understand the need of interpersonal development.

A discouraging compensation plan.

Seldom making compensation plan causes delays in profit because of not serving distributors interests. Further on, this process might cause employee moral down and low morale directly impact confidence level. Low confidence level reduces employee capacity of working hard.

Pricing focused view

Rather than focusing on quality distributors seldom discouraged themselves just to be in the completion with local discount chain. However the basic concept here is customer always prefer to go with high quality product. This is the only reason why they might pay high price to get the product with quality.

Lack of commitment

In order to be successful, company need to have consistency in the process of learning. Learning about different aspect of business would surely get the success. Revenue would be great, customers would be happy eventually this would lead to high returns in terms of profit.


Product Evaluation

Evaluation is the process where different aspects of servicing of the product are determined. This can be worth in ascertaining whether to have a continues flow of service offering, any modification needed or stop it fully. These criteria’s can be used to compare different outcomes which might reflects prescribed objectives.

Financial Performance

• Return on investment versus industry or company standard.

• Profit and Loss for a product compared from year to year.

Sales Performance

• Price variance

• Volume variance

Process Evaluation

Process evaluation is helpful when you need to implement or redefine a marketing effort. Some common uses for process evaluation and examples include:

Advertising Efficiency

• Number of inquiries generated by an advertisement

• Cost per inquiry

Sales-Promotion Efficiency

• Number of inquiries generated by a promotion

• Percentage of coupons/vouchers redeemed


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